Bitfinex’ed Explains Why the Crypto Community got “MtGOX’ed” Again


The Bitfinex’ed account wrote a blog post in which it tries to explain why the community got ‘MtGOX’ed’ again. According to the author, two individuals that tried to take over the Mt Gox exchange have decided to embrace another way to do the same.

The author mentions that Brock Pierce and John Betts, fount the stablecoin Tether (USDT) to accomplish the same task. Bitfinex’ed will be explaining why the Tether banks were such a secret and why Bitfinex and Tether are not transparent.

In order to conduct his investigation, the author explains that he used common sense and evaluated the character of the individuals running Bitfinex and Tether. And indeed, he mentions that academics have always had the same conclusion about Tether, that they printed money from thin air just to buy Bitcoin and other virtual currencies.

He mentions that there are several reports from Bloomberg, The Wall Street Journal and The New York Times in which they explain that Tether has been printing billions of dollars to pump Bitcoin and other virtual currencies. Tether prints chunks of 100 million dollars at a time and profiting from pumping and dumping.

And indeed, Tether does not want to complete all the audits that it should, claiming that they can’t get an auditor.

The author mentions that Tether exchanges are being used as accessories to the ‘Tether scam,’ including Kraken. He even says that in Kraken there are ‘wash traders’ laundering hundreds of millions of dollars.

Tether has also promised that it was going to perform a security and a financial audit in 2016, but the never hider an auditor. At the same time, employees on Reddit claimed that audit was in progress. Later in 2017, they hired an auditor and as it did not work as they wanted, they fired the auditor. In 2018, the company explains that they cannot audit cash in a bank account.

The author explains that the whitepaper ‘promised regular professional audits and that Tether’s own site showed negative equity on multiple occasions. Bitfinex’ed says that they cannot get an auditor on board because of the risk to the auditor's reputation in auditing the company.

He says that the community is ignoring what is going on in the market. However, the company decided to release a ‘not for assurance’ report by the FSS law firm, which has been founded by the former FBI Director Louis Freeh.

However, Louis Freeh had his own whistleblower on Twitter, an individual that exposed his shady dealings.

And indeed, Bitfinex’ed says that a relationship between Tether’s founders, the founders of Tether’s Bank and Free existed prior to the engagement.

Back in 2014, the firm ‘Sunlot Holdings’ wanted to acquire Mt GOX and restart the exchange after the attack. And the proposal made was leaked, showing Brock Pierce as one of the participants. At the same time, the documents show that the current CEO of the Noble Bank (Tether’s Bank), Joh Betts was going to be appointed as the MTGOX director.

Furthermore, the Freeh Group was going to be participating from the Rehabilitation Team with other companies. Free Group International Solutions, LLC (FGIS) was founded by Louis J. Freeh, the former director of the FBI.

But they were not able to acquire MtGox, instead, John Betts decided to create Tether. The user explains that they do not want to be audited because everything would be known. However, he says that there are more things to mention and talk about.

Eugene R. Sullivan, a member of the advisory board of one of Tether’s banks, has also been investigated by Bitfinex’ed. However, he mentions that Judge Eugene Sullivan is listed as an advisor to a company that has been raided two times by the FBI. And indeed, Mr. Sullivan appears as an adviser to Tether’s Bank.

The author of the article says that just like Mt Gox volume was the majority of the volume in 2013 and 2014, in 2017 and 2018, Bitfinex and Tether were able to accomplish the same task using Tether. He then says that exchanges will not delist Tether in the future.

About it he mentioned:

“The vast majority of volume takes place against a single company’s unaudited and fraudulent (due to refusal to complete promised audits) token. If exchanges delist Tether, they will essentially cause the music to stop. This is why no matter how much bad news comes out about Tether, exchanges will not delist it.”

If exchanges decided to delist Tether, they would not be able to continue their operations. Btfinex’ed says that Bitcoin is not decentralized and that it is held by just a few players in the market.

Additionally, he ends up saying that Bitcoin price would be close to $1950 and without Tether it would have never been able to cross $2000 dollars.

Brock Pierce commented, as quoted by Bitfinex’ed (read whole post here):

“The market needed a stable coin that could fill a critical market need. Without it bitcoin wouldn’t have broken $2k yet.”

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